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BRI eyes boost from acquisition of insurer
BRI expansion: BRI's president director Asmawi Syam and BRI's director of compliance Randi Anto talk to the journalists about the bank's innovations and business expansion, in London on Wednesday (Dec
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BRI expansion: BRI's president director Asmawi Syam and BRI's director of compliance Randi Anto talk to the journalists about the bank's innovations and business expansion, in London on Wednesday (Dec. 2) (Dec. 2)
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span class="inline inline-center">BRI expansion: BRI's president director Asmawi Syam and BRI's director of compliance Randi Anto talk to the journalists about the bank's innovations and business expansion, in London on Wednesday (Dec. 2)
Bank Rakyat Indonesia Tbk (BRI) is finalizing the acquisition of life insurance company PT Asuransi Jiwa Bringin Jiwa Sejahtera (BJS), which was previously owned by the BRI Pension Fund (Dapen BRI).
BRI president director Asmawi Syam said the company had acquired 91 percent of the shares for Rp 1.6 trillion, using internal cash, to expand the lender's business coverage to its 50 million clients by offering risk-protection products.
"We already cooperate with BJS in credit insurance. Through the acquisition, we want to deepen financial access. People will be able to add, to the insurance provided by their loans, insurance that takes into account the future, such as education insurance, health insurance and so on," he said at a shareholder meeting in Jakarta on Monday .
The restructuring and post-acquisition optimization of BJS will, according to Asmawi, take approximately two years.
With the current assets of BJS standing at Rp 4.7 trillion, the acquisition is projected to increase BRI's total assets from Rp 773 trillion to Rp 777 trillion.
The bank's consolidated net income is expected to rise Rp to 12.04 trillion from Rp 11.9 trillion, with fee-based income leaping by Rp 99 billion to Rp 494 billion.
A banking analyst at Trimegah Securities, Angga Aditya Assaf, said that the acquisition was positive but would not significantly affect BRI's share price.
"The acquisition will have a positive impact on BRI, especially in terms of fee-based income. However, given a contribution to ROE of just 0.2 percent, a significant impact on share price is unlikely," he told thejakartapost.com.
BRI's return on equity (ROE) is predicted to inch up after the acquisition from 29.22 percent to 29.4 percent, while earning per share (EPS) is forecast to rise from Rp 1,002 to Rp 1,008. (ags)
